Mr Abbott said Kevin Rudd had effectively conceded the Coalition’s criticism of the carbon tax that it would hurt families.

''He admits it is hurting the cost of living, that it is damaging the economy but hasn’t actually got rid of it . . . he doesn’t even understand his own policy,'' Mr Abbott said.

''The only way to get rid of the carbon tax is to change the government.”

Greens Leader Christine Milne slammed Mr Rudd’s announcement.

''When it comes to action he is actually slashing environmental support programs,'' Senator Milne said.

''What he is doing now is just . . . in order to make a political point.''

In an email to Greens supporters she said Mr Rudd was alienating the youth vote with his axing of the carbon tax.

“Our young people can't afford for (Mr) Rudd to put off real action for another year,” Senator Milne said.

“I spent yesterday with 1500 young people at the Australian Youth Climate Coalition’s summit Power Shift. Together, all 1500 of them called Rudd’s office and asked him to aim higher on climate.

“They’re right. Young people have the most to gain and the most to lose from action on climate change. We cannot trust their futures with either of the old parties.”

Mr Abbott said Kevin Rudd was essentially putting Australian tax policy ''in the hands of bureaucrats in Brussels''.

''Kevin Rudd has been deeply misleading with the Australian people and I suspect he doesn’t understand his own policy,'' he said.

''He is not the terminator, he is the exaggerator, he is the fabricator.''

John Connor, CEO of the Climate Institute, said a lot of the cuts to climate programs were a ''big disappointment''.

''We are not happy with deferring this even further,'' he said of the carbon capture and storage program.

On the cuts to the carbon farming initiative Mr Connor said: ''that's not helpful''.

''There's good and bad amongst this package,'' Mr Connor.

The union responsible for representing public service employees, CPSU, also hit back at the slated cuts for the sector.

CPSU National Secretary Nadine Flood said there were actually only 400 new jobs that would go in addition to 400 already slated in the May budget.

''Over the past few years the public service has endured a range of cuts and savings measures but demand for government services keeps going up,” Ms Flood said.

''The public service is not a magic pudding and Government cannot keep making cuts without affecting services.

''We expect some redundancies, along with natural attrition.”

The union responsible for representing public service employees, CPSU, also hit back at the slated cuts for the sector.

CPSU National Secretary Nadine Flood said there were actually only 400 new jobs that would go in addition to 400 already slated in the May budget.

''Over the past few years the public service has endured a range of cuts and savings measures but demand for government services keeps going up,” Ms Flood said.

''The public service is not a magic pudding and Government cannot keep making cuts without affecting services.

''We expect some redundancies, along with natural attrition.”

Australian Retailers Association executive director Russel Zimmerman said the sector was pleased about the prospect of lower power prices.

But many retailers were worried that with a floating price there was the prospect of increases in the future.

''What we are really ending up with is basically a carbon price that is unknown and unpredictable and totally out of our control,” Mr Zimmerman said.

''What if the price ends up $30 or higher?”

''The around 320,000 employees who would be hit by changes to the fringe benefit tax on cars could also be less likely to spend their cash, resulting in losses for retailers.

''They will lose money and they will have less money to spend,” Mr Zimmerman said.

National Farmers' Federation CEO Matt Linnegar said it was disappointing the government had chosen to fund the new scheme by cutting the Biodiversity Fund and Carbon Farming Futures.

"At this stage, it is unclear as to whether the earlier move to the emissions trading scheme will result in a better deal for the farm sector," he said in a statement.

"The first question is, will the reduced cost burden to farmers from an earlier move to a floating price outweigh the benefit that farmers would have received under these two programs, should they have remained fully funded?"

The NFF also wants the ability to sell carbon credits internationally but admits under the current scheme that is "potentially many years away".